Bitcoin Mini CFD

With our Bitcoin Mini CFD you can trade positions that represent a tenth of a full Bitcoin, reducing the margin amount required to trade. This means:

As your position value is 10 times smaller, your required margin is 10 times less.

You trade every $10 price move rather than every $1 price move, reducing your exposure to price volatility.

For example you can trade Bitcoin CFDs as shown below:

Bitcoin ($) Mini (per 10) CFD

Example Buy Price

Mini CFD Trade Size

Value of Position

Margin Requirement (25%)

$11,100

1 CFD per $10 move

$1,100

$277.50

Bitcoin ($) CFD

Example Buy Price

Standard CFD Trade Size

Value of Position

Margin Requirement (25%)

$11,100

1 CFD per $1 move

$11,100

$2,775.00

What is Bitcoin?

Bitcoin is a decentralised cryptocurrency or peer-to-peer digital payment system which is used as a method of investment as well as transaction for other currencies, services or products.

Initially launched in 2009 by an anonymous internet user or group known only as “Satoshi Nakamoto,” the virtual currency has grown rapidly since its inception.

The value of early Bitcoin transactions were negotiated by miners on the bitcointalk forums with each Bitcoin at the time worth an estimated $0.06.

As Bitcoin has become more widely used and as greater quantities of Bitcoin have been mined the price has risen sharply.

Buying Bitcoin vs Bitcoin trading

There are two main ways to invest in Bitcoin online; you can open a virtual wallet and buy Bitcoin through the blockchain at its current market value or you can trade on price movements of Bitcoin by opening a CFD Trading account.

When you buy Bitcoin on an exchange, it is similar to investing in any other physical asset and you will own the underlying instrument which you can then sell at a later date, should the value of the asset rise.

When you trade Bitcoin as a CFD, you are speculating on the price movement of the underlying Bitcoin market. The price of Bitcoin will be quoted in established currencies, primarily USD, and you will not own the underlying instrument. Additionally you will be trading on leverage which allows you a greater market exposure without tying up large amounts of capital.

Trading

When you trade Bitcoin you can go long as well as short

You won’t own the underlying asset so don’t need to set up a virtual wallet

When you trade CFDs on Bitcoin you are trading on leverage, this means you have a larger exposure to the market with less upfront capital. Remember leverage can magnify profits as well as losses.

Buying

When you buy Bitcoin you own the underlying asset and will purchase your chosen amount of Bitcoin at full market value

You will pay capital gains tax on any profits

You will purchase Bitcoin on an exchange, this will require you to open a virtual wallet to store your Bitcoin

It can be expensive to withdraw or fund your virtual wallet, some exchanges charge fees for doing so

Setting up an account and arranging purchase of Bitcoin can be time consuming and overly complicated

What is the City Index policy on Bitcoin forking?

In the event that the current bitcoin splits into two, new bitcoins are created, this is known as a hard fork. We will generally follow the bitcoin that has the majority consensus of cryptocurrency users and will therefore use this as the basis for our prices. In addition we will also consider the approach adopted by the exchanges we deal with, which will help determine the action we take.

We reserve the right to determine which cryptocurrency unit has the majority consensus behind them.

As the hard fork results in a second cryptocurrency, we reserve the right to create an equivalent position on client accounts to reflect this. However, this action is taken at our absolute discretion, and we have no obligation to do so.

If the second cryptocurrency is tradeable on major exchanges, which may or may not include the exchanges we deal with, we may choose to represent that value, but have no obligation to do so. We may do this by making the product available to close based on the valuation, or by booking a cash adjustment on client accounts.

If, within a reasonable timeframe, the second cryptocurrency does not become tradeable, then we may void positions that had previously been created at no value on client accounts.

Over periods of substantial price volatility around fork events, and we may take any action as we consider necessary in accordance with our terms and conditions including suspending trading throughout if we deem not to have reliable prices from the underlying market.

Markets

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade.